Adopt Resolution #18-081 Accepting Bids and Awarding Contract for 2018 Street Overlay Improvements, Improvement Project #18-03

Purpose:
The purpose of this case is to adopt Resolution #18-081 accepting bids and awarding a construction contract for 2018 Street Overlay Improvements, Improvement Project #18-03.

Background:
Numerous public street segments were identified in eight residential developments throughout the City having Pavement and Surface Evaluation Rating (PASER) values between 3 and 5, indicating they are candidates for pavement overlay improvements in 2018.  Overlaying these streets in 2018 will allow the City to maintain the pavement in the most cost-effective manner throughout the serviceable life of the streets.
 
Attached is a figure showing the specific street segments proposed to receive bituminous pavement overlay improvements in 2018.  These street segments are located in the following residential developments:

• Northfork
• Northfork Oaks
• Northfork 2^nd Addition
• Northfork 3^rd Addition
• Northfork Itasca Shores
• The North Forty 2^nd Addition
• The North Forty 3^rd Addition
• Woodland Green

 
A Feasibility Report was ordered for the proposed 2018 Street Overlay Improvements, and on January 9, 2018, the City Council conducted a Public Hearing, approved the Feasibility Report, adopted preliminary assessments, and ordered plans and specifications.
 
The proposed improvements are designated as City Improvement Project #18-03, 2018 Street Overlay Improvements.

Advertisements for bids were published in the City’s official newspaper, the Anoka County Union Herald, and in Finance and Commerce, on Friday, March 30, and on Friday, April 6.

Observations:
The proposed improvements are consistent with the City’s long-term Street Maintenance Program.
 
As discussed with Council on March 27th, bituminous pavement patching work is proposed for several areas of severely damaged pavement in three project areas prior to overlaying the streets.  This will help the overlay improvements achieve their design life of 15 to 20 years.  The proposed bituminous patching work involves removing the existing damaged pavement, shaping and compacting the existing aggregate base, and placing and compacting new bituminous pavement to the same elevation of the existing pavement.  The proposed pavement patching work is shown on plan sheets 20, 21, and 22 of the attached plans.  Staff estimated costs for the bituminous patching work at $33,000.  Per North Valley’s low bid, the cost is anticipated to be $34,711.08, which the City will pay for in full.
 
A total of eight (8) bids were received and opened on May 1, 2018.  All bids were checked for errors and omissions.  The bid of ASTECH Corp. included several mathematical calculation errors.  After adjustments, their bid was increased by an amount of $28.30, which had no impact on the award of bids.  A bid summary is included below, as well as in the attached resolution.
 

CONTRACTOR	TOTAL BID
North Valley, Inc.	$544,224.86
Midwest Asphalt Services, LLC	$557,871.23
GMH Asphalt Corp.	$561,479.63
Omann Contracting Companies, Inc.	$573,712.28
ASTECH Corp.	$591,518.47
Northwest Asphalt, Inc.	$596,864.06
Park Construction Company	$599,791.60
C.S. McCrossan	$715,994.70
Engineer’s Estimate	$581,492.00

 
Bids were favorable.  The lowest responsible bid was received from North Valley, Inc. in the amount of $544,224.86, which is 6.4% less than the Engineer’s estimate for construction costs of $581,492.00.
 
Alternatives:
Alternative #1 – Motion to adopt Resolution #18-081 accepting bids and awarding a construction contract for 2018 Street Overlay Improvements, Improvement Project #18-03.
 
Alternative #2 – Motion to deny adoption of Resolution #18-081 at this time.

The lowest responsible bid was received from North Valley, Inc. in the amount of $544,224.86.
 
The City’s 5-year Street Reconstruction and Overlay Program includes the streets listed above as proposed 2018 overlay improvements, allowing the City to utilize street reconstruction/overlay bonds to fund 100% of the improvements.  The City’s current 10-year Capital Improvement Plan (CIP) includes the proposed 2018 overlay improvements.  Copies of each are attached for reference.  Bonds will be issued in an amount sufficient to cover all project costs initially, after which a portion of the proceeds will be recovered through special assessments.
 
Special assessments may fund up to 25% of eligible improvement costs per Minnesota Statute Chapter 429, Chapter 8 of the City Charter, and the City’s Special Assessment Policy.  Eligible project costs cover all costs except bituminous patching costs.  Proposed special assessment amounts vary by project area.  To be consistent with past practice, special assessments are proposed to be equal across all properties within each project area since each property generally receives the same benefit based on similar property values.  This is consistent with the “per lot” method of assessment defined within the City’s Special Assessments Policy.  Final assessment amounts may be more or less based on final construction costs.
 
Storm water funds will fund all storm sewer project costs.
 
Project costs, which include construction costs plus 14% indirect costs for administrative, engineering, finance and legal fees, total $620,416.34.  Of this amount, $585,705.26 are eligible for special assessments.  Final project costs will be funded using the following funding sources in the estimated amounts shown:

• Special assessments = $146,426.31
• Street overlay bond funds = $460,974.83
• Stormwater utility funds = $13,015.20

 
A special benefit consultation report will be ordered for this project to ensure special assessment amounts do not exceed property benefit amounts.

City staff recommends Alternative #1.

Adopt Resolution #18-081 accepting bids and awarding a construction contract for 2018 Street Overlay Improvements, Improvement Project #18-03.